medicaidplanner Staff asked 5 years ago
I was added to one of my mother’s bank accounts as a joint owner so that I could pay her bills if needed. Will this action be viewed as a ‘gift’ by Medicaid? The account is used exclusively to pay her bills and there is a good record of this activity.
medicaidplanner Staff answered 5 years ago
Unfortunately, there is a risk that the Medicaid agency might deem the addition of you as a joint owner of your mother’s bank account as a gift (a violation of Medicaid’s Look-Back Rule). An important consideration is if the bank account is titled with an “and” or an “or” between the names. For example, Mary Woods and Bruce Woods or Mary Woods or Bruce Woods.
With “and” bank accounts, neither individual can take money out of the account without the other’s consent. Signatures of both persons are required on checks or to withdrawal money. If your mother added your name to an “and” account, Medicaid will consider the entire amount in the account as a gift (violation of the Look-Back Rule) to you on the date your name was added. Your mother could, therefore, be penalized with a Penalty Period of Medicaid ineligibility. However, if your mother added your name to the account prior to the Look-Back Period, she will not be penalized.
With “or” bank accounts, either individual can write checks or withdrawal money without the other’s permission. This type of joint account is what is generally used when an adult child is added to a parent’s account to pay their bills. The addition of the child’s name is not considered a gift, and therefore, does not violate Medicaid’s Look-Back Period.
It is vital to keep meticulous records of all deposits and withdrawals. Furthermore, it is not recommended that you contribute any of your own funds to your mother’s account, as Medicaid will automatically count 100% of the funds towards Medicaid’s asset limit. If you did contribute funds, and can prove it with documentation (i.e., deposit slips), the portion you contributed would not count towards the limit. You should continue to use the account exclusively to pay your mother’s bills. If you were to use any portion for your own personal use (without depositing your own funds into the account and proving it), it would be a violation of Medicaid’s Look-Back Rule. Additionally, a “gift” made by either yourself or your mother from this account violates this rule.
Jointly owned bank accounts add a layer of complexity to Medicaid eligibility, and therefore, are not generally recommended. Persons who have joint accounts (or are considering it) and are unsure if they have (or will) violate Medicaid’s Look-Back Period can consult a Medicaid Planning Professional. Find the most affordable option.